Understanding Your 403(b)


Sgroi Financial

Planning for retirement is a crucial aspect of your financial well-being, and one option available to many nonprofit employees is the 403(b) retirement plan. While many people are familiar with 401k plans offered by private companies, the 403(b) plan has unique features and benefits.


What is a 403(b)?

A 403b plan is designed as a tax-sheltered retirement plan designed for employees of the public and nonprofits sectors, such as charities, schools, and qualified religious organizations. Similar to a 401k, a 403(b) enables you to contribute a portion of your salary to a tax advantaged retirement account.  Some employers may also provide matching contributions to 403(b) plans, meaning they will match a certain percentage of your contributions. Taking advantage of employer matching contributions can significantly enhance your retirement savings.  


Tax advantages and Contribution Limits

One of the primary benefits of a 403(b) plan is the tax advantages it offers. Contributions to a 403(b) account are typically made on a pre-tax basis, meaning that you won’t pay tax on the amount you contribute. This cuts down on the income tax you owe for that year based on your top marginal tax rate. For example, if the last $10,000 of your adjusted gross income is taxed in the 22% tax bracket, placing $10,000 into a 403(b) would save you $2,200 in taxes.1 You can set aside up to $20,500 in a 403(b) in 2022 (increasing to $22,500 in 2023). Those 50 or older can make an additional catch-up contribution of $6,500 in 2022 and $7,500 in 2023.1     

In addition to the current tax savings, the money will also grow tax-free until you begin making withdrawals..


A 403(b) retirement plan offers a valuable opportunity for public and non-profit sector employees to save for retirement with tax advantages and potential employer matching.  By understanding how a 403b works, its contribution limits and employer match, you can make informed decisions to work for a financially stable retirement.

Our team at Sgroi financial has been assisting teachers with their 403(b) plans for over 52 years. We have worked with thousands of teachers, educators, and other school employees from over 100 school districts across New York state. Our team of experienced fiduciaries will work in your best interest so you can strive for the retirement of your dreams. Learn how to get started today!



  1. The benefits of a 403(b) Plan (Investopedia, 2023)

Schedule your first meeting right now:

If you don’t wish to schedule a meeting online, you can contact us directly via phone or fill out the contact form below. We look forward to working with you.


Sgroi Financial is a full service, independent financial planning firm proudly serving the Western New York area since 1971. We offer services that will help you achieve your financial goals including retirement planning, investment management, estate planning, college planning and insurance. We help individuals, families, retirees, working adults, young adults and business owners.